Wednesday, September 5, 2012

The post-trial proceedings in California will take until at least December, but in the meantime there will be news from other countries as well. For example, on Friday there will be news from a Dutch court (I'm not aware of the details yet, but Korean media have mentioned something). As I said on previous occasions, there will be four Samsung v. Apple trials in Mannheim between mid-September and mid-October, and I have now found about two design-rights-related hearings to be held by the Düsseldorf Regional Court -- the first court in the world to ban the Galaxy Tab 10.1 -- in late September and late October:

On September 25 there will be a trial of Apple's design rights infringement and unfair competition claims against various Galaxy Tabs. At least some -- if not all -- of the claims that will be discussed have already been adjudicated on a preliminary basis because of Apple's preliminary injunction motions targeting three Galaxy Tabs (10.1, 10.1N, and 7.7). Even the appeals court, the Düsseldorf Higher Regional Court, has already ruled on those matters. I'll address the procedural history further below.

On October 23, the there will be a hearing on a preliminary injunction motion targeting various Samsung smartphones, one of the newest ones (if not the newest one) of which is the Galaxy Note (the original Note, not the upcoming Note 2; nor is the Galaxy S III at issue). The other accused products include the Samsung Galaxy S I, S I PLUS, S II, Ace, Y, R, Wave M as well as two iPod competitors (Media Player S WiFi 4.0 und S WiFi 5.0).

What's unusual here is that there is a hearing on a preliminary injunction motion (i.e., a kind of motion that courts decide on the fast track) on relatively old products. The original motion was brought in November 2011. The court had already scheduled hearings for April and August, but both of them were postponed at the parties' request. I don't know why the parties pushed back that hearing. A delay is almost always in a defendant's interest, but plaintiffs filing for a preliminary injunction rarely stipulate to it. It's possible that Apple expected developments that would increase its chances of winning -- for example, the appeals court's decisions on the Tab 10.1N and the Tab 7.7 or developments in an invalidation proceeding before the OHIM, the EU agency in charge of all Community design registrations. And after pushing back the April hearing, Apple probably didn't see much of a commercial difference between a hearing in August or October for the sales potential of those relatively old products in Germany.

At this stage, the way in which the outcome of this lawsuit will really matter is that it clarifies for both parties how much of a resemblance to Apple's gadgets Samsung's future products may bear.

The late-September trial is an opportunity for both parties to improve the situation in their favor. A decision on a preliminary injunction is based on an initial assessment of the likely outcome at the end of the case, and "likely" does not mean "guaranteed". Also, a higher court's decision on a preliminary injunction matter is just based on this kind of assessment and does not bind a lower court in a full-blown main proceeding. That said, these courts have already held a number of hearings and given a lot of thought to the relevant issues and the parties' arguments. Unless a party presents some game-changing evidence or makes a new and unusually compelling argument, any court in the Düsseldorf Regional Court's place would normally be leaning toward a final decision consistent with the appeals court's preliminary position. In any event other than a near-term settlement, the appeals court will see this matter again, and it won't be bound to its own preliminary assessment, but again, unless there's a particular reason for which the final decision would have to differ from the preliminary one, there won't be major surprises.

While it's going to be difficult for both parties to get a more favorable outcome, the defendant -- in this case, Samsung -- against an intellectual property infringement claim is more likely to benefit. With more time, a defendant may identify additional prior art.

Also, Samsung may hope that favorable rulings on Apple's tablet design rights in other jurisdictions, especially the UK, may have some persuasive value in Germany.

I'm sure Samsung will also point to a Korean decision that it doesn't infringe Apple's tablet design patent and to the related part of the California verdict. Both these jurisdictions are very different from Germany, and there are also some differences in terms of the claim limitations between the U.S. design patent and the European Community design (there may also be differences between the Korean design right and the European one). Moreover, both of them will be viewed in light of a potential home court advantage, and professional judges in jurisdictions that don't put IP issues before laypeople are generally skeptical of jury verdicts. At least they typically don't believe that juries set real precedent. Nevertheless, Samsung may get some limited benefit out of the California verdict because there was a group of people (who otherwise ruled largely in Apple's favor) who didn't think that there was much risk of confusion among buyers of tablet computers. While a professional patent-specialized judge wouldn't attach much weight to a jury's assessment of highly complicated technical or legal issues, confusion on the part of buyers is a question of fact on which ordinary citizens may have an opinion worth thinking about. However, a jury is far too small to constitute a statistically representative sample of potential tablet computer buyers, and while it made a unanimous decision, a survey of the same group of people would likely have led to a more nuanced result, and potentially even to a majority of respondents believing in confusion.

I just digressed into the difficulties a German judge would face when trying to weigh the persuasiveness of different foreign decisions and opinions. Given how difficult this is, it's certainly much easier for a court to look at its own past positions and match them against the opinion rendered by the appeals court in the same district (in this case, it's even based in the same town). I just wanted to explain that Samsung is less unlikely than Apple to benefit from what has happened around the world in connection with this tablet computer design patent dispute since the first preliminary injunction order that came down 13 months ago.

Absent a settlement, this Community design lawsuit may even go to two more courts than the two Düsseldorf-based ones. There could be an appeal to the Federal Court of Justice ("Bundesgerichtshof" in German) and either that court or the Düsseldorf Higher Regional Court might decide to put one or more key legal issues concerning Community designs -- which are an instrument under European Union law, while "European" patents in this field of technology are a national issue -- before the Court of Justice of the European Union. This here is the commercially most significant Community design dispute at the moment. It may very well raise some legal questions of first impression. And even if Apple and Samsung settle at some point, it's not certain that design patents and their international equivalents will be included in a cross-license agreement. They are very frequently excluded from patent cross-license agreements. In that event, the only thing the parties can do is get clarification from the courts -- possibly from the highest courts available to them -- on where to draw the line between acceptable and infringing degrees of similarity.

In other words, this may still take a lot of time before it's really sorted out.

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About Me

Florian Mueller is an app developer who used to be an award-winning intellectual property activist. His 30 years of software industry expertise span different market segments (games, education, productivity and infrastructure software), diverse business models, and technical and commercial areas of responsibility. In recent years, Florian advised a diversity of clients on the patent wars surrounding mobile devices, and on their economic and technical implications. (In order to avoid conflicts of interest, Florian does not hold or initiate transactions in any technology stocks or derivatives thereof, except that he is long AAPL.) He is now developing games for smartphones and tablet computers.